Real Estate Investing

Encroachment in Real Estate 

May 16, 2024

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Encroachment 

Boundary disputes are common among neighboring property owners. Disputes that involve unlawful intrusion or unauthorized structures extending into your land or crossing the property lines are known as encroachment. 

Encroachment can be intentional or unintentional. It is often confused with easements, which occur when a homeowner agrees to let a neighbor access a part of their property. 

If left unaddressed, encroachment can lead to neighborhood conflict, property title issues, or even the possibility of your neighbor gaining rights to the encroached land despite the proper limits previously established. 

In this article, we discuss the encroachment real estate term and explore ways to address these issues effectively. By taking proactive steps, you can protect your property rights and prevent potential conflicts. 

What is Encroachment in Real Estate? 

Real estate encroachment is defined as a situation where one property owner violates their neighbor’s property rights by creating or extending structures past survey-defined boundaries.  

Encroachment can be intentional (e.g., an owner purposely building a deck in part of their neighbor’s backyard) or unintentional (e.g., accidentally extending a fence beyond the boundary line). Encroachment typically refers to sustained violation over time, but temporary encroachment is also possible. It commonly occurs along disputed property lines, where neighbors argue about who owns the land in certain areas. 

Structural encroachment is a specific type of encroachment that involves a property owner extending structures onto public spaces, like sidewalks or roads. Sidewalks and roads are typically owned by the local government. Paving, building, or allowing trees to grow over these boundaries may lead to the government removing them. 

Implications of Encroachment 

Consistent encroachment can have many negative consequences for both parties. Here are a few of them. 

Property Valuation 

Land surveys and the placement of property boundaries play a role in property valuation, so tolerating encroachment over time could lead to a decrease in your home’s value. For this reason, mortgage lenders require buyers to get a professional survey to verify that the loan amount is appropriate for the property’s value.  

Legal Action 

If encroachments are left unresolved, one neighbor could take the other to court. This is common where both owners believe they have property rights in the disputed area. Spending time in court is both inconvenient and costly, as the losing party will likely have to compensate the other.  

Trouble Selling Your Home 

Properties without clearly defined survey boundaries cannot be easily sold, due to interference with the property valuation. If you have a boundary dispute with a neighbor, it is important to get the land surveyed and establish clear ownership boundaries before attempting to sell your house. Encroachment could also potentially decrease the home’s sales price if the encroacher is successful in gaining the legal right to use your land. 

Property Title Issues 

Clear title is important not only when buying or selling your home, but also when applying to refinance your mortgage, warding against squatters, or getting an appraisal. Unresolved encroachment can cause issues with your property title and interfere with any of the above. 

Encumbrance 

Encumbrance occurs when someone else has a legal claim against your property. If encroachment is unresolved for long enough, the encroacher could try to make a legal claim to your property, depending on local laws and the length of encroachment. This could cause issues for you in reclaiming the portion of land they encroached on. 

Encroachment Vs. Easement vs. Encumbrance 

These three terms are similar, and all have to do with property boundaries. However, they each have very different meanings. 

Encroachment involves unauthorized use of or extension onto a neighbor’s property.  

By contrast, easements are consensual agreements for land use often involving compensation. For instance, you and your neighbor may decide to mutually agree on an easement granting the neighbor access to a lake through your property. In return, you will be compensated.  

In some cases, a prescriptive easement may result if encroachment persists over time. A prescriptive easement is a right to land or property that is acquired when a trespasser uses someone else’s property consistently over time—usually in a manner that is open, adverse, continuous, hostile, and notorious. These terms have specific legal definitions, but in general, the trespasser’s use of the land must be continuous over time, obvious to others, and outside of any legal agreement or tenancy relationship. If the trespasser continues this use for long enough (typically a set number of years required by state and/or local law), they may be granted a prescriptive easement. This easement will be recorded on their property deed and will show up on property title searches. 

Additionally, if an encroachment goes on unaddressed for a long period of time without an easement, an encumbrance may come into play. An encumbrance is a claim against (part of) a property by someone other than the owner. If this claim has legal merit, it could result in a neighbor gaining legal rights to the part of your property they encroached upon. Encumbrances also cause issues with the transfer of the property’s title. 

Understanding Encroachment Outcomes 

A neighbor’s encroachment onto your property could potentially turn into an easement if you both agree that their presence or structure is unobtrusive or acceptable for another reason. Other times, encroachment might be resolved with a conversation where the encroached-upon owner explains the issue and the encroacher removes the structure, fence, tree branch, etc. 

However, not all property boundary disputes end this amicably. Unresolved encroachments could lead to one owner taking their neighbor to court, where a legal action will decide who has the rights to the land. 

How to Prevent and Resolve Encroachment Issues 

To resolve encroachment issues, you must first assess the extent of the violation on your property. Minor violations may be best approached with conversations or easements, while major ones might require swift legal action. Below are a few strategies for resolving and avoiding encroachment issues as a property owner. 

  1. Get a land survey. Professional land surveyors can clarify boundaries and property lines so that both parties know where their property rights begin and end. This can be helpful to do before starting additions or renovations so that you can ensure the work falls within property boundaries.
  2. Have a conversation with your neighbor. Often, unintentional encroachment (when a neighbor does not realize they are encroaching) can be resolved through conversation. Simply approach your neighbor in a friendly manner and explain your understanding of the property boundary. If they are cooperative, they may remove the encroaching structure, fence, tree branch, or stop trespassing. 
  3. Consider selling an easement. As a property owner, you have the option of selling an easement to your neighbor. Depending on the terms of the easement, this would allow your neighbor physical access to a certain part of your land. This way, your neighbor can resume activities that are convenient to them, while you are properly compensated.
  4. Take serious issues to court for resolution. If you’re planning on selling your home soon, refinancing, or getting an appraisal, all property title issues need to be clear. If the encroacher does not seem cooperative or willing to discuss the issue amicably, you may need to take your neighbor to court. This will help you maintain the value and marketability of your property while also establishing clear boundary limitations for your ownership or future owners’.

Conclusion 

By understanding the nuances of encroachment in real estate and taking proactive steps to address any issues that may arise, you can protect your property rights and prevent potential conflicts. 

Whether you resolve encroachment problems through communication, legal action, or other means, it’s important to take action sooner rather than later. This will ensure that you both maintain the value of your property and cultivate a peaceful coexistence with your neighbors. 

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